Storm investors consider CBA offer

SCORNED Storm Financial investors face a "monumental dilemma" as they decide whether to take a Commonwealth Bank offer or continue with a class action.

The uncertainty could deepen if two other high-profile banks - Macquarie Bank and Bank of Queensland - also take "get-out-of-jail-free cards" from the corporate watchdog and offer investors a settlement.

Thousands of investors lost about $3 billion - the value of their portfolios at the peak of the market - when Storm collapsed in 2008.

Sydney law firm Levitt Robinson's class actions against the three banks was expected to run alongside an Australian Securities and Investments Commission trial alleging the banks supported Storm's unregistered managed investment scheme and were knowingly involved.

The banks deny the allegations.

After a week's delay, hundreds of those people involved in two class actions arrived on Monday to begin a three-month battle in the Federal Court in Brisbane.

But the packed courtroom listened as Judge John Reeves dismissed the charges against the CBA which reached a settlement agreement with ASIC on Friday.

Barrister Steve Finch told a packed courtroom it did so without admitting liability.

Barrister Tony Morris sought an adjournment so his clients, who were pursuing compensation from the CBA, could consider settlement offers from the banks for "fairness".

He said the CBA expected to provide indicative compensation figures within a fortnight.

Mr Morris said the "bolt from the blue" settlement offer would be relatively unsatisfactory for many of his clients but it was still a more generous offer than they have seen before.

He said the case should be adjourned so they could have time to make an informed judgment about whether to settle.

Mr Morris said his clients could only accept the money on the basis they withdrew legal proceedings against the banks.

Sunshine Coast police officer Sean McArdle, who lost a $4 million portfolio in the debacle, told APN he would not accept the CBA offer and planned to pursue the class action as far as he could.

He said this move showed Australia's biggest bank could "buy itself out of any wrongdoing for a pittance" and the other banks would be "crazy" not to take a settlement deal too.

Mr McArdle said, based in his initial calculations, investors were likely to get 4.5 to 9 cents in the dollar.

"They will never be held accountable," he said.

Storm Investor Action Group co-chairman Mark Weir told APN the settlement package did seem to calculate the loss legitimately - money invested, money borrowed, borrowing cost, interest less money taken out of the investment - but he, too, had trouble reconciling how $136 million could service the number of people likely to qualify for compensation.

"For those who've had a carrot dangled in front of them, do we run the full course on the risk of going to the High Court in three years time and getting the same amount or do we take this money, get on with it and make the most of our lives? That's the question," he said.

"Some of them will be determined to roll the dice completely, probably because they've got some working life ahead of them. For others it will be a monumental dilemma."

Judge Reeves questioned whether the remaining trials against Storm, Macquarie Bank and Bank of Queensland should still be heard together.

Mr Morris argued they should because courts could make different findings and leave his clients in an untenable position.

He said his legal team had prepared its case expecting to "coat-tail" on ASIC witnesses which were no longer being produced.

Mr Morris said he could not produce those witnesses "at the drop of a hat" and would need time to work on logistics and further preparation.

Judge Reeves adjourned the case until next Monday - two weeks after it was supposed to begin.

The withdrawal of Commonwealth Bank means the court proceedings should be shortened considerably.

EARLIER: Court proceedings into the Storm Financial collapse are likely to be delayed until later this month after an eleventh-hour settlement threw months of planning into chaos.

Judge John Reeves has dismissed ASIC charges against the Commonwealth Bank after the bank reached a settlement agreement on Friday.

Barrister Steve Finch told a packed Federal Court in Brisbane today it did so without admitting liability to supporting an unregistered managed investment scheme or being knowingly involved.

The move has also placed class actions against Storm Financial and associated banks in turmoil.

Barrister Tony Morris told the court his clients, who were pursuing compensation from the Commonwealth Bank, must be given the chance to consider settlement offers from the banks for "fairness".

He said the Commonwealth Bank expected to provide indicative compensation figures within a fortnight.

Mr Morris said the "bolt from the blue" settlement offer would be relatively unsatisfactory for many of his clients but it was "still a more generous offer than they have seen before".

He said the case should be adjourned so they could have time to make an "informed judgment" about whether to settle.

Mr Morris said his clients could only accept the money on the basis they withdrew legal proceedings against the banks.

Judge Reeves questioned whether the remaining trials against Storm, Macquarie Bank and Bank of Queensland should still be heard together.

Mr Morris argued they should because courts could make different findings and leave his clients in an untenable position.

He said he also needed an adjournment because his legal team were expecting to "coat-tail" on ASIC witnesses who were no longer being produced.

Judge Reeves has given the various legal teams an hour to decide whether they need more mediation and how long they need to adjourn the case.

The withdrawal of Commonwealth Bank means the court proceedings should be shortened considerably.